OEMs’ layoff strategies suggest plan for upturn

In hard times past, when an economic crisis resulted in reduced demand for business aircraft and business aviation services, layoffs were common, often with little notice and minimal compensation. In this recession, which has hit business aviation like the downhill run on a roller coaster with no bottom in sight, companies have sought to ease the trauma of job loss.

Whether it is a higher social conscience at the executive level or a desire to protect a valuable investment that will be needed when things turn around, companies are offering laid off employees severance packages, a continuation of benefits for an extended period, even assistance in career transition for those who wish to find a new profession.

With the layoff or furlough of more than 20,000 employees in the past year, more than a few members of business aviation’s skilled worker pool have needed such assistance. Some of that assistance is mandated by the federal Worker Adjustment and Retraining Notification (Warn) Act and some by union contract agreements, while other help has been voluntary on the part of various companies.

Gulfstream, in an effort to avoid outright layoffs at its headquarters facilities in Savannah, Ga., implemented furloughs–an unpaid leave period during which the company continues to pay employee benefits. As of mid-July, 2,200 Gulfstream workers were on furlough.

To avoid laying off large numbers of employees at its service centers, Gulfstream instituted reduced-hour work weeks, depending on the level of activity at each center.

At all of its facilities, according to a company spokesman, Gulfstream offers out-placement services such as skill enhancement workshops; job search assistance; and an online career transition portal with job announcements, a résumé database and more.

Bombardier is also taking responsibility for its employees beyond government and union requirements. “When someone is gong to be laid off, the matter goes first to a committee where they try to find the person a new position within the company, even if the position requires training for new job skills,” said a Bombardier spokesman.

If a transfer within the company isn’t possible, Bombardier will provide job-search coaching and assistance with creating a résumé and finding work elsewhere. At Cessna Aircraft in Wichita, the company followed the requirements of the Warn Act, “whether the employee qualifies or not,” said a spokesman. He added that the company gave employees not covered by a collective-bargaining agreement a severance package based on years of experience, “and even those with less than a year [on the job] are given a generous basic package of pay and COBRA benefits.”(The Consolidated Omnibus Budget Reconciliation Act, or COBRA, provides for a temporary continuation of health coverage at group rates for certain employees following termination. –Ed.)

“We are also working with other Textron companies to place people if we can and we have worked with local placement services at all [Cessna] locations,” said the spokesman.

French OEM Dassault Aviation recently signed an agreement with three of four unions to put in place a part-time work arrangement from September to February 2010.

At Embraer, where the layoff of some 4,000 workers was announced in February, the company has gone “well beyond” compensation required by Brazilian labor laws, according to a spokeswoman. The exit package includes a full year of free health coverage for the employee as well as legal dependents; access to a job re-integration program to assist those laid off in finding other jobs; severance pay equal to two months’ salary; and priority re-hiring status.

Across the industry, companies large and small are making efforts to ease the trauma of job loss, as well as retain a certain amount of goodwill on the part of those let go. The industry is nothing if not resilient, said one executive, and “it will survive.”